Employee State Insurance- Here is What You Should Know…
The ESI Act was instigated with the intention of benefitting the factory workers and later on was made applicable to all organizations having 10 or more workers. As per statistics issued on March 31, 2016, the total beneficiaries of the ESI Act mounted to 82.8 million.
Employee State Insurance (ESI) is a social security provided to the employees in India with reference to the health-related incidents happening during the tenure of their employment. The fund management in ESI is executed by Employee State Insurance Committee (ESIC) and the rules are applied as per the rules and regulations insisted on ESI Act 1948. The ministry heading the ESI is the Ministry of Labor & Employment, Government of India.
What are the ESI Contribution Rate Slabs?
In the recent years, there has been a predominant role played by Income Tax in ESI. As a result, we have today ‘Pehchan’ smart cards that come as part of ‘Project Panchdeep’. Apart from the ESU insured employees, underprivileged families are now eligible to benefit these ESI facilities enabled in ESI hospitals and dispensaries under ‘Rashtriya Swasthya Bhima Yojana’. There are also medical, nursing and paramedical schools in specific ESI hospitals run by the ESI Corporation.
The benefits offered to the employees as per the ESI Act is briefed and listed below:
• Sickness benefit
o Extended Sickness benefits
o Enhanced Sickness benefits
• Maternity benefit
• Dependents benefit
• Disablement benefit
• Other benefits
o Funeral expenses
o Vocational/Physical rehabilitation
o Old age medical care
Employees who have a monthly income of RS.21000/- or below are eligible for ESI benefits. Earlier the income limit was RS.15000/- and it was only in 2017 the new income limit of RS.21000/- was set.
The main element determining the ESI contribution is the Gross Monthly Income of the Employee or Employer. Gross Salary is that amount of the income before making any deductions and this includes the following sub-elements:
• Basic pay
• Dearness Allowance (DA)
• City Compensatory Allowance
• House Rent Allowance (HRA)
• Attendance & Overtime
• Payment of un-substituted holidays
• Meal Allowance
• Uniform Allowance
• Other Special Allowances
The contributing element however does not include Leave Encashment, Gratuity on Discharge or Retirement, Retrenchment Compensation, Washing Allowance and Annual Bonus.
There has been several time-to-time reforms made by ESIC and in the now, there has been a reformation brought to ESI policy. As per the new modification made, the cost of living index is climbing and in par with this issue, the 181st EIC meeting held in the mid-week of February 2020 decided to increase the prevailing confinement expenses amount from RS.5000 to RS.7000. This will facilitate pregnant ladies who are unable to benefit the ESI advantages from ESI hospitals and dispensaries and depend on other hospitals, because of pressing issues that they face.
The Goods and Service Tax (GST) is an indirect/consumption tax levied on the supply of goods. Currently, GST is divided into 5 tax slabs for collection of tax- 0%, 5%, 12%, 18% and 28%.The Goods & Service Tax came into effect on July 1, 2017 as per the 101st Amendment of the Constitution of India by the Indian Government.
The GST types are determined based on the province in which the goods and/or services are exchanged and transactions made. The types of GST include: • Central Goods & Services Tax (CGST) • State Goods & Services Tax (SGST) • Union Territory GST (UTGST) • Integrated GST (ITGST)